Why? One of the industry’s biggest challenges is keeping abreast of the race for new technology, where advances in the financial services marketplace seem to take place daily. Fueled by the innovation of fintech firms and coupled with the need to satisfy the demands of the modern consumer, technology is becoming all important to member service. Credit unions must keep up.
In 2012, the Credit Union National Association, Madison, Wis., established the Credit Union Financial Exchange (CUFX) to create a cooperative structure through which credit unions, credit union service organizations and credit union vendors could share existing and new technologies via an open architecture integration standard that would be available to the industry without cost.
According to the CUFX website, the group leverages credit union, core and vendor collaboration to develop and maintain an integration standard that – when adopted by credit unions and vendors – will simplify the process of connecting various best-of-breed solutions with whatever core transaction system a particular credit union may be running.
The projected positive outcomes of widespread use of such a standard included a reduction of costs and time spend on systems integration; improvements in the member experience; a reduction of redundancy across all credit unions in systems implementation and integration efforts; and a better competitive niche for credit unions in the financial services marketplace, because they can more effectively innovate and more rapidly adopt technology.
Born of Necessity
Under the leadership of the CUNA Technology Council, 75 credit unions and vendors participated in the creation of CUFX. Like many innovations, this effort grew out of necessity.
“For credit unions to grow, remain competitive and provide the best member experiences across all channels, they must continually improve their technical infrastructure,” wrote CUES member Heather Moshier, EVP/IT for $7 billion San Diego County Credit Union, and a member of the CUNA Technology Council Governing Board, in this CUNA News Now article at the time of CUFX’s formation.
The core objective of CUFX, underscored in a May 2015 Credit Union Times article, is to improve the member experience. According to the article, “achieving this requires the removal of technology barriers, a reduction in integration complexities and operating expenses, and providing the CUFX standard and support with no direct cost or fees.”
CUFX could be a solution to one of the biggest issues facing credit unions in the technology age, wrote John O’Shaughnessy, senior partner at Mobile Strategy Partners, Atlanta, on the CUNA Technology Council blog in October 2015. “With modest budgets, credit unions are consistently challenged to provide competitive online and mobile solutions to keep existing members and recruit new ones – especially mobile-centric millennials.”
CUFX, O’Shaughnessy wrote, brings an open architecture platform that promotes real-time collaboration and could hasten the adoption of new technology and reduce costs and time spent in doing so. He describes the platform as providing “the latest industry recommendations for secure online and mobile communications” and as being “designed to allow software developers to focus on delivering user-facing functionality rather than complex back-end integration.”
Growing Vendor and CU Support
The group now has a Governing board, Steering Committee and Vendor Advisory Board, to which four new members were added in December 2015. Participating organizations include CO-OP Financial Services of Rancho Cucamonga, Calif.; and Finivation of New York, N.Y., and Alkami Technology, Inc., of Plano, Texas, both CO-OP strategic partners. Seated on the venture’s Vendor Advisory Board are Terrence Griffin of CO-OP and Robert Vandehey of Alkami; while representing Finivation are Brian Bodell (Steering Committee) and Guido Belcic (Architecture Committee).
The CUFX standard has reached Version 3.1 , released in July 2015.
Among the original champions and beta testers of CUFX is $2 billion Baxter Credit Union, based in Vernon Hills, Ill.
“We had an incredible number of vendors we had to integrate; we wanted to support this initiative to lower our overall costs,” Tim Tibbals, AVP/enterprise architecture for the CU and a member of the CUFX architecture committee, told Credit Union Times in the May 2015 article.
Indeed, five of the nation’s 12 largest credit unions are supporting CUFX: Alliant CU, Chicago, Ill.; America First FCU, Riverdale, Utah; BECU, Seattle, Wash.; San Diego County Credit Union, San Diego, Calif.; and Schools First Federal Credit Union, Santa Ana, Calif.
With the CUFX open architecture approach, participating credit unions and vendors clearly see the value of creating a pathway by which credit unions can quickly and economically adopt advanced, services-oriented technology as it comes to market – not months later.
About the Author
Terrence Griffin is Chief Information Officer of CO-OP Financial Services, Rancho Cucamonga, Calif. He can be reached at firstname.lastname@example.org or (866) 812-2872. Griffin is a member of the CUFX Vendor Advisory Board.
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